In 2016, mobile Internet traffic in Russia grew year-on-year by 48% to approximately 3.8 billion GB, according to materials from the Ministry of Telecom and Mass Communications. Growth has slowed down, but not significantly – last year it was 54%. Mobile Internet traffic is 7 times less than wired Internet traffic (27.2 billion GB in 2016). However, mobile traffic is growing much faster: fixed traffic increased by just over 15% in 2016.

So far, cellular networks are coping with the growth of Internet traffic, but in order to maintain the quality of access, operators will have to continue to invest heavily in construction, primarily in LTE networks, says TMT Consulting CEO Konstantin Ankilov.

Operators, on the contrary, tend to reduce investments. Thus, Megafon intends to reduce investments by 8.5–16% to 55–60 billion rubles in 2017, according to the operator’s materials. MTS predicts a reduction in investments in 2017 to approximately 80 billion from 83.6 billion rubles. in 2016, T2 RTK Holding (Tele2) plans to achieve positive cash flow by the end of 2017. And to achieve this, the operator will have to reduce the cost of building networks, notes Raiffeisenbank analyst Sergei Libin.

Revenues from mobile Internet are growing slower than traffic - in 2016 in Russia they increased by 12%, notes Ankilov. But due to declining voice revenues and increased competition, most operators' overall cellular revenues are shrinking. Therefore, operators may increase tariffs, Ankilov does not rule out. Indirectly, this is already happening - since the beginning of the year, mobile operators began to abandon unlimited tariffs, he recalls.

According to calculations by Mikhail Alekseev, managing partner of AC&M-Consulting, the total revenue of operators from mobile Internet increased in 2016 by only 11%. In his opinion, traffic is now growing mainly due to the increase in its use by subscribers: the number of mobile Internet users, according to him, increased in Russia in 2016 by 7.5%, and their average monthly traffic by 34%. Traffic doubles every two years, and revenues grow by only 10–15% per year; this cannot satisfy operators, Alekseev believes. Operators have almost no room for direct tariff increases, but indirect price increases are already happening. As foreign experience shows, operators can refuse the most generous unlimited Internet options, significantly increase the cost of traffic beyond the limits included in service packages, and introduce a minimum fee for Internet access per day, week or month, regardless of traffic, Alekseev predicts.

Mobile traffic is growing along with the number of smartphones in the hands of users and the expansion of the coverage area of high-speed mobile Internet, notes Iskratelecom CEO Alkhas Mirzabekov. In Moscow, traffic is growing faster than in the regions, he believes. But this has not yet affected the business of fixed-line providers: the speed of wired Internet is still much higher, and the unit cost of access is lower, he notes.

In the fourth quarter of 2016, mobile Internet traffic of VimpelCom subscribers increased year-on-year by 39%, and revenue from its transmission by 17%, says Anna Aibasheva, a representative of the operator. The growth in traffic is associated with the promotion of package tariffs, the spread of smartphones, and an increase in the number of users, she lists. In Russia, prices for mobile Internet are among the lowest in the world, and its quality is higher than in most countries with higher tariffs, Aibasheva notes. This puts operators in difficult conditions, and one of the possible ways out of this situation is to change the pricing model: for example, so that it is based on the cost of a unit of data transmission, rather than a minute, she believes.

In 2016, Internet traffic on the Tele2 network increased 3.5 times: the operator actively invested in infrastructure development, continuing the construction of new generation networks in the regions and expanding the coverage area in Moscow, says its representative Olga Galushina. In 2017, the operator plans to launch LTE networks in 10 new regions, she notes. Tele2 is not going to raise prices - on the contrary, in April 2017 it launched new tariffs, lowering the unit cost of a megabyte, Galushina claims.

To prevent traffic growth from affecting the speed of mobile Internet, Megafon is building and modernizing its network infrastructure at a faster pace, says operator representative Yulia Dorokhina. In terms of the total number of base stations (BS) and the number of LTE BS, Megafon was the leader in Russia in 2016, she notes, citing data from Roskomnadzor. The number of smartphones and tablets on the network will continue to grow, so the growth of Internet traffic will continue this year, Dorokhina predicts.

In 2016, data traffic in MTS mobile networks increased by 50.4% to 1.21 petabytes compared to the previous year, says its representative Dmitry Solodovnikov. At the end of 2015, the company launched LTE networks in all regions of its presence, after which it completed and strengthened the networks and worked on coverage. MTS has invested significant funds in previous years and can now gradually reduce the level of capital expenditures, he believes.

Traffic continues to grow